Category Archives: Due Diligence

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Sophisticated mortgage fraud schemes are becoming more and more common. Be careful when choosing the ‘private financing’ route. Know who you are dealing with and ensure you don’t end up being part of a mortgage fraud scheme or worse, money laundering scheme.

The Ethereum Scam Database is a useful tool that helps guide cryptocurrency investors away from scammers. Since launching last year, they have identified a total of 2,627 scams including 246 active scams. For more information on the scams identified visit https://etherscamdb.info/.

The cryptocurrency market is booming with hundreds of Initial Coin Offerings (ICO) looking for financial support from investors. Not all of these ICO will be successful and all such investments are considered to be high-risk with the potential for high return. So, how do you evaluate which ICOs are legitimate and which will have the best chance of being successful? Through due diligence of course!

Here are some things to look at prior to making an investment:

Research and learn all you can about Initial Coin Offerings. An ICO is a crowdfunding event to raise money for a new cryptocurrency asset, company, or venture. Unlike an Initial Public Offering (IPO), you don’t necessarily own shares of the company. Instead, you own tokens that can be traded on exchanges; the values of which will rise or fall depending on the success of the venture. Currently, ICO are unregulated so they offer both greater risk and greater rewards for investor.

Evaluate the ICO venture.

Research the target market. Just like any other start-up, you want to understand who their target customer is, the size of the market and whether the market is likely to increase or decrease.

Research the competition. Look at what solutions other companies are providing.

Ask for a comprehensive business plan and financial plan. Understand how much the ICO is trying to raise and why. Find out know they plan to spend the money raised and determine what their timeline is for product rollout?

Since there are no legal reporting requirements for ICOs to accurately reports key information to investors, an analysis of peer reviewed comments and positing may prove invaluable. This information must also be taken with a grain of salt however as peer reviews have been known to be swayed or bought.

Evaluate the community support to determine if the ICO will be supported by reliable exchanges.

Evaluate the funding and distribution of coins. How many coins will be created and distributed? Not all ICOs are distributing all of the circulating supply of tokens.

Evaluate the team behind the ICO. After all, you need a competent team to manage substantial funds. A team with experience, integrity and an in-depth understanding of the community and the market is one of the most important criteria for success.

With a proper due diligence, investors can identify the pros and cons of each investment. The ICO market is still in its infancy and will no doubt go through many ups and down. Some ICOs may be more popular than other, trading up quickly. But real questions must be asked to determine if there is something substantial behind the coin to support its continued growth and success.

As a leading provider of due diligence investigations, we have been conducting due diligence investigations of all sorts for nearly two decades now. Many of our first clients are still with us and together we have pushed boundaries as the evolution of what constitutes due diligence has taken place.

Due diligence is no longer a term that can be used to describe a cursory investigation process that focuses solely on surface or superficial information.

Today’s standard of due diligence now requires a much deeper investigation that is broadly focused on obtaining ALL relevant information and / or verifying ALL material facts that may assist the client in determining the potential risk of a transaction.

For example, it may not enough to simply know a company is legally registered. You may need to independently verify all of the information obtained from the corporate registration. Does the company operate at the address provided? Who are the named principals and what is their relationship to the company? Does the company use other operating or trade names? Have there been recent changes that may affect the transaction in question or the quality of the investigation? If you really want to identify red flags or areas of concern … you have to dig deeper.

As with all business decisions, investigation budgets and time constraints may limited a client’s desire or ability to meet today’s standard of due diligence. Many operate under the misapprehension that some due diligence is better than no due diligence and in some cases that may prove to be true. But from my experience, I find that this often leads to an mistaken sense of confidence leading clients to take more risk than they may otherwise would have.

If you have been conducting the same due diligence investigation for years, it may be time to re-evaluate and improve upon it. Ensure that the due diligence investigation you have is designed to meet your specific needs and objectives.

This type of fraud seems to happen more often these days. Forex trading is fraught with risks in itself. To protect yourself, always do your due diligence before investing with any individual and / or company especially online companies who can easily misrepresent themselves.

And don’t stop there. Conducting a post-investment due diligence is a great way to identify when legitimate companies are heading for trouble. Often, companies can cut and run after years in business. There are often signs before hand so if you are paying attention, you may have a better chance to get out before its too late.

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Enviro-Lynx Investigations is a leading provider of background investigations, due diligence investigations, business background investigations and corporate intelligence solutions. We also provide a full range of investigation services, fraud examination services and litigation support services.

As a boutique agency, we take pride in our personal, hand on approach to investigations and client management. Our goal is to get the most accurate and affordable information possible into the hands of decision-makers so that they can reduce their risk exposure and improve their decision making process.

Enviro-Lynx Investigations is a licensed private investigation agency in Ontario, Canada. All investigators are licensed, Professional Certified Investigators, Certified Fraud Examiners and open source intelligence specialists. We are proud members of CPIO, ACFE, WAD, CII and IWWA!